Levering Business to Customer Business Value through Internet Marketing - Research Proposal Example

Research proposal Levering B2C (Business to Customer) Business Value through Internet Marketing. Abstract This report proposes a research to assess the levering of B2C business models through internet marketing. The proposed research strategy is a case study of Tesco. The choice of this firm is justified by indications on its business model and its marketing and advertising strategies. Past studies have shown how e-marketing adds business levers businesses. The literature review will guide this study through identification of variables, parameters, scope and data sets. Primary data shall be collected via emailed questionnaires. The data obtained will be tabulated and analyzed using qualitative data analysis techniques. Grounded theory or analytic approach will be used to analyze the data though the former option is more preferable. The data shall then be used to test the hypothesis. The findings of the research will be important to Tesco and other B2C firms as it will inform them on the effectiveness of internet marketing. Introduction E-commerce has grown tremendously in the past few years in the UK and globally more so in the developed world. This has been facilitated by increased access to internet connection especially broadband, technology growth, increased awareness on the benefits of e-commerce and a change in lifestyles. The e-commerce industry has been segmented into a number of sections with the main ones being groceries, clothing and apparel, electronics and hospitality and travel. The groceries segment, dominated by supermarkets, faces numerous challenges as opposed to the other segments due to the short shelf life of majority of the items on offer. For this reason, online groceries shoppers account for only 6% of total groceries sales in the UK (Online grocery shopping 2011). However, the industry is expected to grow further to 5.4% of the retail market by 2015. A report carried out by the Guardian in October last year put the UK’s internet industry at £100 billion worth accounting for over 7% of the GDP. This growth of the internet is powered by growth in online shopping. In fact, the UK has the biggest e-commerce market globally by amount spent per capita. This has also fueled online marketing and advertising. The online advertising industry generates £3.5bn per year. Projections indicate that the industry is poised for greater growth spurred by increased online retailing and online marketing. Business Background Tesco is a brand name for one of the largest supermarket chains in the UK that is publicly traded in the London Stock Exchange. Established in 1919, the supermarket introduced online retailing in December 2009 on some of its items. As of May 2011, it was the third biggest online retailer in the country after only a brief presence (Tesco, 2012). Online shopping has grown in popularity as it allows more convenience especially for working mothers who have little time to go shopping. Thus the creation of an online store was a response to a market need. Having succeeded in the conventional in-store market, Tesco aims at stamping its authority in the online sector. The fact that Tesco operates both online and offline stores make it a perfect choice of case study. Any other choice of an online store alone would require a control case study of an offline store. Tesco suits this research study as it employs both the traditional marketing channels and the internet. Apart from internet marketing, it has also adopted online retailing on some of its items. This aspect makes it possible to assess the response of consumers and internet users to online retailing by the firm and subsequent growth in internet marketing. The research will assess how the introduction of the online store and the marketing tactics used by the firm has contributed towards adding value to the firm. Value in this case shall be interpreted as increased sales, profits, client base and brand equity in the market. In hindsight, Tesco is not alone in internet marketing. Its traditional rivals in the industry which includes Woolworths, Sainsbury, Walmart, Aldi, Costco among others have also gone online. A key aspect in internet marketing and e-commerce is the creation of a website. A website should also be well positioned and visible to the internet user and attractive to compete well with other millions of websites. Research problem A number of retailers in the supermarkets industry have gone online. Most of these players have been successful in in-store outlets. As they go online, they have targeted a new market segment of internet users. As such, they have used the internet as a new marketing and distribution channel. Establishing new marketing channels and creating websites and the technology needed to run it cost these firms millions of pounds. Some important questions that come up are; is it really worth it? How effective is e-marketing as a marketing/distribution channel? Or how effective is e-marketing? To address these questions best, one needs to understand the core elements of brand building and how they are facilitated by internet marketing. The core elements of brand building are identified as quality, positioning, communications, credibility, long-term marketing and internal marketing. Research question What opportunities are there for B2C business models in creating value for their brands through internet marketing? Research objectives To fully address the research question, the study will be guided by the flowing objectives. i. How does Tesco ensure quality of its services and products through internet marketing? ii. How well is the Tesco brand positioned in the market and minds of consumers to create brand value? iii. How well has internet marketing been adopted as a marketing communication channel by the firm. iv. How has internet marketing being employed internally in the firm? v. How well has the firm protected its domain name? Literature review Increased trust and awareness of online retailing and e-commerce in general have made internet users more responsive to internet marketing. Online consumer reviews have become trusted sources of information for potential buyers and marketers rely on them for marketing their products and services (Mudambi 2010). Internet advertising allows internet users more interaction space and users have control on the level of interaction that they can take from the advertisers (McMahan, Hovland & Mcmillan 2009). This feature also gives more room to internet advertisers to distinguish their brand by offering different levels of interaction from their competitors. Kiang, Raghu and Shang (p.386) view the internet as a potential ‘communication channel, a transaction channel and as a distribution channel.’ However, the ease of using the different channels is determined by the type of goods. Easily put, not all goods and services are suitable to advertise through this channel. This implies that efficiency of e-marketing will vary across a range of goods and services Internet marketing defies the traditional marketing strategies as supply chain power balance in e-commerce awards consumers more bargaining power. Consumers can compare prices across the board more easily. This development has affected contemporary strategic marketing decisions in many firms (Doherty & Fiona 2009). Research indicates that pricing has more significance in consumer decision making in online shopping than in offline buying. Searching for goods in online shopping is easier and services of supermarket attendants are unnecessary. Such affiliate services cannot be used as a marketing tool in e-commerce as most services are automated. Creation of a corporate web site provides a platform for ‘brand building and relationship marketing’ (McMahan, Hovland & McMillan 2009, p. 63). This requires creation and registration of a domain name that suits well with the brand. While firms have to deal with imitations in the market, e-commerce players are faced with imitations of their brands too in terms of domain names (Krishnamurthy 2009). Therefore, internet markets have to be wary of imitating websites that can mislead their clients and divert traffic flow. Traffic flow to a given website provides valuable information to the firm in terms of the success of its marketing efforts and brand visibility and also track consumer behavior (Lee 2011). Heijden and Verhagen (2004, p. 611) apply the ‘technology acceptance model’ (TAM) to analyze consumer behavior. The model gives weight to ease of use, enjoyment and attractiveness of websites as key determinants in internet marketing. They link positive internet user views on the two aspects with intentions to purchase. The authors note that some key elements of ease of use of a website maybe primary activities, information quality, language and color as antecedents of usefulness. These will have a great influence on the intentions to use that website or even visit it again. The authors go ahead and say that ease of searching items and general ambience and attractiveness of a website may attract traffic to a website. However, the actual purchase price is highly determined by price. Same way as conventional marketing, the success of internet market is assessed by ability to induce purchase. In their dissertation, Menéndez and Jonsson (2010) acknowledge that consumer decision making process is influenced both by the cognitive and affective processes. However, the role of the affective process in consumer decision making and how it applies in e-commerce requires more research. In this case, marketers must therefore engage emotional aspects in e-marketing with a view to creating an enjoyable experience rather than a mechanized way of acquiring a product or service. Kotler (2010) calls this creating an appropriate atmosphere that transforms willingness to purchase to actual purchase. Firms which have succeeded in conventional marketing can apply the same strategies in the contest of e-marketing and attain success. But the success has to be measured. Hypothesis H=1 There are numerous business growth opportunities for B2C business models in creating value for their brands through internet marketing. H≠1 There are no numerous business growth opportunities for B2C business models in creating value for their brands through internet marketing. H=2 Tesco Supermarkets has attained business leverage through internet marketing. H≠2 Tesco Supermarkets has not attained business leverage through internet marketing. Research philosophy This research will use a positivist philosophy and a deductive approach. The deductive research approach is suitable when there is research hypothesis. This research has formulated two sets of hypothesis on e-marketing based on knowledge from the literature review. Methodology This research will use a case study approach on one subject, Tesco Supermarkets Online store. As a case study, the single situation to be studied is Tesco Online Store while the multiple sources of evidence shall be past Tesco online shoppers, regular internet users and Tesco employees. Questionnaires shall be distributed to a random sample of 1500 respondents obtained from the national directory via emails with web links to the questionnaires. Twenty five questionnaires from past Tesco online store shoppers who have made purchases within the last six months will be randomly chosen, another 25 from will be from general internet users with over 6 hours of internet access weekly and11 will be chosen randomly from Tesco employees. Thus the total sample shall be 61. Only questionnaires that will be filled out fully and correctly shall be used in the study. Alternative data collection methods such as interviews will consume more time and will limit the sample size hence cannot be used. Focus groups would also not be suitable as they are vulnerable to group think. With the data being qualitative in nature (descriptive), the study will rely on guided closed questions. Open ended questions in this case cannot apply as they may introduce other themes not in the scope of this particular research. The research questions will be guided by five main themes. These themes are; main purpose or usage of internet, types of goods purchased and purchasing likelihood/frequency/expenditure, category of websites, search engines used etc. The research will be flexible enough to leave room for emergent themes which must be duly marked as ‘emergent or unanticipated themes.’ However, it must be noted that the research questions should not be formulated in a way to prompt superficial answers. The naming of the themes can also prove to be problematic. Through emails, the research will also inform respondents about the intentions of the research and assure them about their privacy. Ethical considerations shall be observed. Furthermore, authority from Tesco’s management shall be sought before commencing the research. Alongside with the request to carry out the study, the research shall seek unpublished and published reports from Tesco’s management on traffic flows to their website and e-marketing expenditure. This will be important in linking data obtained from the research with theory and also be critical in making recommendations. Limitations The research could be faced by protection of information regarding customer flow to the Tesco online store. Some organizations may filter the amount of information available to outsiders in order to protect their competitiveness. The research could also be faced by the problem of poorly filled out questionnaires. The problem of un-replied emails is catered in that the web links submit data automatically. Data analysis Correctly filled out questionnaires will be numbered and their responses analyzed. Matrix displays and/or flow charts shall be used to analyze the data. Flow charts shall be used to illustrate the most persistent consumer decision making pattern that respondents follow when they are faced with internet marketing communication messages. These internet communication messages are primarily from the Tesco’s websites though there are other affiliate and non affiliate websites that offer internet users a link to the Tesco supermarket’s website. Matrix displays on the other hand show the connection between the themes nd the expected results as per the hypotheses. Identification of themes is the best noted method of data analysis for descriptive data (Bazeley 2009). Themes will be presented as labels for complex categories that will be broken down further by the flow chart diagram. Decision diagram(s) shall be formulated from past Tesco customers, another or others from general internet users and another from Tesco employees. Decision making patterns from Tesco employees will specifically capture the effectiveness of Tesco’s internal marketing efforts. These charts will be compared and contrasted to gain an understating of how effective internet marketing is in creating brand value for businesses in the B2C model. Below is the expected matrix display that will be used to analyze the different themes and create patterns and derive conclusions. Matrix display How website/online store was located Amount of time spent on website (mins) Website seen first through search engine Website name/ domain known from word of mouth Website known through online adverts Read More